According to new research by independent advisory firm Capital Economics, the cash that is held overseas by U.S. firms is very unlikely to be ever repatriated and the report also states that the amount of cash held overseas by U.S. firms has risen to $2.5 trillion.

“This vast pile of foreign cash could provide a substantial boost to GDP ( gross domestic product) if it was ever brought home. But the chances of this happening under the current tax system are very low,” Andrew Hunter, a U.S. economist at the firm, said in a new note on Monday.

Within the time period of the previous decade, the stock of earnings that are held abroad by U.S. corporations to a total of $2.1 trillion which was nearly six-fold over the previous decade, the company had estimated two years ago. The company now claims that the sticks held abroad by U.S. corporations had risen to $2.5 trillion by the end of last year.

It was just last month that the European Union authorities ruled that Ireland must claw back billions in unpaid taxes from U.S. tech giant Apple and  this new research comes on the back of that ruling . the European commission ruling had raised questions in the business word over the future of multinationals in Europe and international taxation rules even as it created huge ripple and shockwaves across the business world.

Without specifying exactly how much would be returned, earlier last  month Apple’s Chief Executive Tim Cook said that the company expects to repatriate billions of dollars of global profits to the United States next year. According to Reuters who cited a study published last year by two left-leaning nonprofit groups, more than $181 billion in accumulated profits have been shifted and stored in offshore accounts by Apple.

While claiming the Apple was not among the biggest of US corporations that hold huge sums of money in offshore accounts, Capital Economics estimate that Apple now has $91.5 billion of earnings permanently reinvested overseas. Capital Economics claimed that Capital Economics is being held by Microsoft and General Electric in off shore accounts. When contacted by the media Microsoft declined to comment and GE was not immediately available for comment.

“The U.S. requires firms to pay the full 35 percent corporate tax rate – the highest in the developed world – on all worldwide income, but only if those funds are repatriated. This gives firms a clear incentive to keep earnings overseas,” Hunter said in the note.

“That said, the prospect of a deal being agreed to reform the corporate tax system is no longer as remote as it once was,” he added. He was referring to the campaign promises of both presidential candidates Hillary Clinton and Donald Trump.

(Adapted from CNBC)

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